Fighting Chinese onslaught: Government plans to set up bulk drugs manufacturing hubs

Each manufacturing park is estimated to cost about Rs 200 crore, he said, adding that Andhra Pradesh and Telangana are interested in offering land for the purpose.Kirtika Suneja | ET Bureau | April 18, 2016, 05:57 IST

Each manufacturing park is estimated to cost about Rs 200 crore, he said, adding that Andhra Pradesh and Telangana are interested in offering land for the purpose.NEW DELHI: The government is planning to set up bulk drugs manufacturing hubs as part of strategy to reduce the country’s dependence on Chinese inputs for its exports-intensive pharmaceuticals industry.

India meets about 85% of its bulk drugs’ requirement with imports from China. The landed price of bulk drugs from China is 15-20% lower than the cost of producing them locally, a factor that has fanned imports. A senior official told ET the government is considering establishing three or four pharma parks for manufacturing active pharmaceutical ingredients (API). “Due to the China factor we need to strengthen our self-dependence on essential medicines… correspondence with the PMO (Prime Minister's Office) is going on,” the official said, requesting anonymity.

Each manufacturing park is estimated to cost about Rs 200 crore, he said, adding that Andhra Pradesh and Telangana are interested in offering land for the purpose.

The government had launched a similar scheme in 2007 — called Petroleum, Chemicals and Petrochemical Investment Regions — with the aim of developing dedicated integrated chemical clusters in coastal states. Although the scheme proved to be a nonstarter, this time efforts are being made with rigour as the PMO has been keeping a keen watch on the matter.

“API imports from China are sometimes of poor quality and spurious, due to which formulation quality gets affected. To ensure quality ingredients, we must have our own manufacturing,” said another official.

India imported APIs worth $3.9 billion in 2014-15, of which drugs worth $3.3 billion came from China. In 2004-05, API imports stood at $800 million. “If China snaps supply of APIs, then our national healthcare programmes will suffer. Also, China’s dominance in the market can lead to price increases of many essential drugs,” said Ajay Sahai, director general of FIEO.

However, the plan to set up API parks faces one major hurdle — clearance from the environment ministry since APIs are highly polluting.